UK Government announces new curbs on bogus holiday sickness claims

On:16 April 2018

Photo: Ashotel.

Updated 16 April 2018: The UK’s Foreign Office has announced new curbs on bogus holiday sickness claims. The FCO says that the rules will fix the legal costs that can be claimed in package holiday sickness claims, closing a loophole which the travel industry believes has helped fuel a rising number of claims. The industry fears that this claims epidemic is raising the prospect of higher travel costs for British tourists despite four couples being sentenced or ordered to pay significant legal costs since October last year after making false package holiday sickness claims : these cases were private prosecutions brought by tour operators Thomas Cook, TUI and Red Sea Holidays.

The rules will come into effect in the coming weeks, ensuring the curbs will be in place before the next summer holiday season. Up to now, legal costs in overseas package travel claims have not been controlled, which has meant costs for tour operators can spiral out of all proportion to the damages claimed. This has led many operators to settle holiday sickness claims out of court, rather than challenge them.

Justice Minister Rory Stewart said that claiming compensation for being sick on holiday, when you haven’t been, “is fraud. This damages the travel industry and risks driving up costs for holidaymakers. This behaviour also tarnishes the reputation of British people abroad. That is why we are introducing measures to crack down on those who engage in this dishonest practice.”

British Ambassador to Spain Simon Manley said that the “issue of fraudulent sickness claims has rightly caused concern in Spain, and has had a serious impact on Spanish hoteliers. These latest measures to control legal costs, announced by the British Government, as well as the steps taken at the end of last summer, show how seriously we take this issue, and underline our determination to clamp down on loopholes and fraudulent claims. Almost 19 million British tourists visited Spain last year and, whilst the vast majority of holiday makers will not make false claims, these steps will help to deter those that might be tempted to do so. As our travel advice says, making a false claim could result in legal proceedings in the UK or in Spain.”

According to the travel industry, there has been a substantial increase in claims, which some, eg ABTA, have estimated to be as high as 500% in recent years. While uncontrolled costs have discouraged tour operators from challenging claims, they have also emboldened claims management companies to encourage tourists to pursue holiday sickness compensation, with touts reportedly operating in European resorts.

To help tackle this, Ministers asked the Civil Procedure Rule Committee, which is responsible for setting rules on legal costs, to look at bringing package holiday claims within the fixed recoverable costs regime. This would mean tour operators would pay prescribed costs depending on the value of the claim and length of proceedings, making defence costs predictable and assisting tour operators to challenge bogus claims.

The Committee has now agreed to this rule change – the rules will be updated on Monday, and will come into effect shortly. More detail will also be published on the Government’s approach, alongside its response to a recent call for evidence, as part of the Government’s commitment to tackling the country’s compensation culture, which has seen it recently introduce a Civil Liability Bill which includes measures to reduce the unacceptably high number of whiplash claims and allow insurers to cut premiums. Other reforms include the forthcoming ban on cold calling and tougher regulation of claims management companies.

Updated 18 October 2017: A British couple who falsely claimed €20,000 compensation for food poisoning they allegedly suffered while on a Thomas Cook holiday to Majorca in 2015 have been jailed by a Liverpool Court. The pair, 53-year-old Deborah Briton and 43-year-old Paul Roberts, were sentenced to nine and fifteen months respsectively in prison after admitting four fraud charges. Thomas Cook said that the case was serious, and a reflection of what is happeing in the British travel industry. Here in the Canaries, tourism authorities and the hostelry industry have expressed satisfaction at the outcome of the case, the first of its kind to involve a custodial term.

Updated 29 August: The Foreign Office has said today that false holiday sickness claims have a negative impact on those with a genuine claim and also on the reputation of British people abroad. As part of a crackdown on false claims, one firm responsible for pressuring people into making holiday sickness claims has recently been stripped of its licence by the Claims Management Regulator. The FCO says that intelligence gathered by the Claims Management Regulator (CMR) officers revealed that Lancashire based Allsure Ltd had encouraged holiday-goers to fabricate or embellish symptoms of gastric illness to get compensation. Further evidence showed the firm had used deceptive sales scripts – exaggerating expected pay-outs to entice consumers. This conduct has led to the firm’s licence being cancelled, which means that it can no longer offer regulated claims management services to new or existing clients.

Kevin Rousell, Head of the Claims Management Regulator said: We will take firm action against claims businesses which engage in serious misconduct. Seeking to encourage false claims will not be tolerated. CMR, based at the Ministry of Justice, regulates companies that offer to help people claim compensation for issues such as personal injury and mis-sold financial products. The action taken against Allsure Ltd is the latest in a series of moves by government to crackdown on fake sickness claims, following concerns from the travel industry of a surge in insurance claims for gastric illnesses like food poisoning being brought by British holidaymakers.

ABTA itself advises that anyone on holiday who is approached by a Claims Management Company tout should tell the tour operator and the hotel staff so that they can take appropriate action. Anyone who falls ill on holiday should again let the tour operator and hotel management know at the time. There is more advice from ABTA HERE. Anyone who has received an unsolicited call from a CMC trying to persuade them to make a fraudulent holiday sickness claim can report them to the Claims Management Regulator: you can find out more from the Government HERE.

Updated 15 June 2017: Six months on from the last post about so called British ambulance-chaser style lawyers and the Canarian Tourism Institute has announced that two British people have been arrested on suspicion of falsely claiming to have received food poisoning in their Majorca hotel. The Guardia Civil apprehended the pair last Friday, and say that this is the first case of its kind based on the instigation by British legal firms of claims of illness caused to British tourists by Spanish hotels. They also say that more prosecutions will come, throughout Spain.

Updated 15 December 2016: The Confederación Española de Hoteles y Alojamientos Turísticos says that fake claims by the so called British ambulance-chaser style lawyers are now in the region of €50 million. CEHAT says that the matter is now considered so serious that the Spanish Secretary of State for Tourism, Matilde Asián, is now taking charge of the matter.

The interest at a national level is due to the Government’s concern that such fake claims are damaging the impression of Spain among its main client base in the UK. The Spanish Government is already dealing with the UK’s Foreign Office in respect of potential measures to deal with the problem, and the FCO itself has now issued a statement that Spain is a secure destination and that to make fake claims is a crime that will result in prosecution.

Original post 15 September: Ashotel has denounced what ît says are British ambulance-chaser style lawyers inciting tourists in south Tenerife to make false claims against hotels. Association president Jorge Marichal met on Tuesday with representatives from the Canarian Government and National Police to convey the concern of hoteliers over the practice, which he says is carried out from “claims clinics”, which are no more than vans done up to look like ambulances. Marichal stressed that since the motive was purely financial the practice, which the association has watched develop throughout the summer, could be classed as “organized crime”.

The vans, with English text plastered over them to urge tourists to denounce hotels for a range of problems like food poisoning, have been circulating around south Tenerife, Ashotel says, stressing that the vans have even stopped at the doors of some hotels to capture “clients”. The practice is apparently already known in the Balearics and Andalusia, and Ashotel says that apart from being in contact with Government and police in Tenerife, it is also in contact with hotel associations in those areas to see what combined action may be possible. At the very least, Ashotel says, there is an issue with an unlicensed business being carried out by workers who, moreover, are not making social security contributions or complying with tax regulations.

Jorge Marichal said these were “pirate lawyers” who seemed to be associated with firms in the UK engaged in the same practices. Often, it seems, the claims are presented without even the most basic medical evidence, simply the allegation that the tourist became ill and had to buy medication, the unproven cost of which is claimed with threats of legal action if reimbursement were not to follow. The key, Ashotel says, is that the claims are then presented in the UK, causing hotels here either to face international legal action with elevated costs, or simply to pay up even though, Marichal says, the vast majority of the denuncias are false.

12 Comments

Workers not paying their social contributions?!!
That’s a laugh… Line up all the employees of ANY hotel in Tenerife and see how many of them have a declared income of more than 600 – 700€ a month – likely none.
They have been dodging social and tax payments for decades and continue to do so.
Now, they are being held accountable by foreign law firms, probably because people are tired of being fobbed off when they make legitimate complaints.

I kind of agree with you Andy. There are many businesses here who have an attitude that their customers are tourists and we won’t see them again.
This ambulance chasing service has put the boot on the other foot and Ashotel does’t like it. They rely on the fact that tourists won’t incur the cost and expense in Tenerife to pursue legitimate complaints about poor service but are bleating because someone has opened an avenue for them to bring legal action in the UK, requiring the Ashotel members to face cost and expense to defend themselves. If the ambulance chasers did not think that the claims had merit they would not take them on.

From where I stand I see no evidence here that “nobody wants British tourists” … quite the reverse. Some, I grant you are drunk hooligans, but “filthy people” is an opinion designed to be offensive, and so says more about you than anything else. Most British visitors, however, are not like that at all, and many are golfers or pensioners … and as such are so desirable as tourists that the Canarian authorities go out of their way to appeal to them, applaud their loyalty, and seek to reassure them whenever they feel it’s necesary, like the Tenerife Cabildo’s Hug a Brit campaign (HERE) after the Brexit referendum.

I would be more sympathetic if CEHAT could give evidence of a single “fake” claim rather than label all claims as fake. Their solution is simple – contest the claims and demonstrate in court how they are fake. Courts will decide every single case on the evidence. I suppose if a court upholds a claim then CEHAT will label it corrupt – the evidence being that their profits have been dented.

In reply to BillyD, the claims are lodged in the UK so would require very considerable expense on behalf of individual hoteliers to attend and brief lawyers in two jurisdictions: so part of the “scam” appears to be that they presume the claims will just be settled as it would be significantly cheaper for the hotel. The proof offered in some cases in Majorca was as little as a pharmacy receipt for Imodium with 200 claims lodged against one hotel ! Of course there will be some genuine cases of food poisoning, but you are usually so ill that you cannot even leave the hotel and will require a doctor to be called in (I speak here from personal experience) and every couple of years there will be an isolated report of one hotel being hit by Norovirus) It should also be pointed out that that many of these so called “lawyers” are in fact only “specialists” in claims, just like the cold callers who advertise for injury claims. I also have to refute Andy Ward’s earlier comments regarding non payment of social & tax – that might be true for British bars & restaurants but certainly not for hotels in general as they are highly regulated by a Convenio and hotel jobs are very much sought due to all the benefits available. The side comment by Ashotel about these clinics being unlicenced is suggesting that non payment of tax etc is one way the authorities can take them on. These are outfits that could generate several hundreds of thousands of pounds in fees to the “lawyers” so can in no way be compared to a Lookie Lookie man !

Having worked in UK courts for over 30 years I would be astounded if any qualified lawyer would launch a claim with only a pharmacy receipt as evidence it just wouldn’t happen. To successfully claim the onus is on the claimant to establish that they were owed a duty of care and that the hotel was negligent in not providing it – only then does the hotel have to mount a defence. I think the imodium story is just that – a story. A specialist in claims is normally a very well qualified lawyer who specialises in tort law just as others specialise in criminal, contract, family and indeed constitutional law. It is very common for law firms to employ para legal staff as evidence gatherers but these persons have no rights of audience in the courts and the case must be presented by a properly qualified lawyer who would never present a case with only a receipt as evidence. One very effective and cheap way for the hotels to defend themselves against food poisoning claims is to freeze a sample of each meal for a period of time and have it analysed if a claim is lodged. No one who provides a paid service to customers can be exempt from the law. A flood of claims against one hotel could be evidence of fraud but it could equally be evidence of a poor service.

Well here’s a quote of the “story” from the local media ….. Something which emerged from that meeting was that the firms doing the pursuing of claims aren’t necessarily law firms at all. They are “specialists” in “claims farming” who hand on the claims to lawyers. They have a background in having pressed claims in other sectors, such as banking and car insurance, but have now moved into holiday claims in a major way. Estalella noted that more than 200 claims had been made against one hotel alone. He also pointed out that UK law allows claims to be made for up to three years with the burden of proof (to refute the claims) placed on the hotel. Very little evidence is actually needed to press claims. Ones made in Majorca have needed a simple receipt from a chemist’s for the purchase of imodium. http://majorcadailybulletin.com/news/local/2016/10/14/45644/travel-industry-uniting-fighting-fraudulent-holiday-illness-claims.html

Many Car Parks carry disclaimer notices stating that you park at your own risk.
Well, why don’t Restaurants and Hotels display similar notices ?
If you eat out, it should be at your own risk.
Her Majesty the Queen never eats salad or cold food when she dines out, perhaps that is a trait we should follow.
Piping hot food is usually free of germs.
I personally have stayed in Spanish hotels several times annually for the past 43 years, and I have never encountered anyone with food poisoning.

I’ve found a website for one of the Claims Firms – saying average payout 2,500. Can claim up to 2.5 years (presumably to give them time to process under 3 years) … must have been an all inclusive package bought from UK registered Travel company. Actually states Medical Records “useful, but NOT essential” – online form asks claimants to describe symptoms suffered having listed detailed symptoms of Food Poisoning in a prominent place on the site …

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